Installment Promissory Note

THIS NOTE SUPERSEDES AND REPLACES INSTALLMENT PROMISSORY NOTE DATED
IN ORIGINAL PRINCIPAL AMOUNT OF $1,200,000


** Wherever used herein, the name Bank Leumi Trust Company of New York is
replaced with Bank Leumi USA


NOTE: Fill in all blanks before signing. If a particular provision is not
desired or has no applicability, delete the provision or, if it
contains a blank space, insert "N/A" or the words "Not Applicable"
in such space. All deletions should be initialled by the Borrower
and the Bank.


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INSTALLMENT PROMISSORY NOTE


[LOGO] Bank Leumi Trust Company of New York New York, N.Y.
MEMBER FDIC


Feruary 9, 1998
------------ ---- $ 1,200,000.00 ----------------------


A. GENERAL; TERMS OF PAYMENT


1. FOR VALUE RECEIVED, the undersigned, Data Systems & Software Inc. and
----------------------------------
(Exact Name of Borrower) Databit Inc , a corporations (1) organized under the laws of the State of - ------------------ ------------ Delaware (the "Borrower"), hereby promises to pay to the order of BANK - ------------------ ** LEUMI TRUST COMPANY OF NEW YORK (the "Bank"), at its office at 564 Fifth Avenue
-----------------
(Address of Branch Office) the principal sum of One Million Two Hundred Thousand
-----------------------------------------------------------
(Write Out Principal Sum) Dollars ($1,200,000.00):
-------------


|X| in twenty one (21) consecutive monthly (2) installments;
--------------- ------------- the first twenty ( 20 ) installments of which shall each be in the amount
---------- of $ 57,142.86 , and the last installment of which shall be in the amount of
-------------- $ 57,142.80 , payable on the first day of each month (3) in each -------------- --------- --------- year, commencing May 1 , 1998 ; (or)
--------------- ---------
|_| in ( ) installments, to be paid on on the dates
------------ and in the amounts set forth in the following schedule:


Date Principal
Payment Due Amount of Payment
----------- -----------------


The Borrower will pay interest on the unpaid principal amount hereof from time to time outstanding, computed on the basis of a 360-day year (the charging of interest on the basis of a 360-day year results in the payment of more interest than would be required if interest were charged on the basis of the actual number of days in the year), at a rate per annum which shall be equal to


|_| % per annum; or
-----------
|X| 1 % per annum above the rate of interest designated by
----------- the Bank, and in effect from time to time, as its
"Reference Rate", adjusted when said Reference Rate changes. (The
Borrower acknowledges that the Reference Rate may not necessarily
represent the lowest rate of interest charged by the Bank to
customers.)


The Borrower will pay interest, at the rate described above, monthly on the first day of each month in each year, commencing March 1 , 1998, at maturity
------------ ---- (whether by acceleration or otherwise) and upon the making of any prepayment, as hereinafter provided. In addition, the Borrower will pay interest on any overdue installment of principal for the period for which overdue, on demand, at a rate equal to 3% per annum above the rate of interest hereinabove indicated.


In no event shall interest exceed the maximum legal rate permitted by law.


- ---------- (1) Insert the word "corporation" or "partnership," as applicable, or strike the
phrase if Borrower is an individual. (2) Insert the word "monthly," "quarter-annual" or "semi-annual," as applicable. (3) Insert the word "month" if installments are payable monthly or, if the
installments are payable quarterly or semi-annually, the names of the months
in each quarter or 6-month period in which payable.


Form No. 640 (R10/86)


2. All Property (as hereinafter defined) held by the Bank shall be subject to a security interest in favor of the Bank as security for any and all Liabilities (as hereinafter defined). The term "Property" shall mean the balance of every deposit account of the Borrower with the Bank or any of the Bank's nominees or agents and all other obligations of the Bank or any of its nominees or agents to the Borrower, whether now existing or hereafter arising, and all other personal property of the Borrower (including without limitation all money, accounts, general intangibles, goods, instruments, documents and chattel paper) which, or evidence of which, are now or at any time in the future shall come into the possession or under the control of or be in transit to the Bank or any of its nominees or agents for any purpose, whether or not accepted for the purposes for which it was delivered. The term "Liabilities" shall mean the indebtedness evidenced by this Note and all other indeb ...